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U-verse gains no plus for competitors

AT&T TV service crosses half-million subscriber mark

NEW YORK -- AT&T's gain could mean pain for cable operators and Dish Network.

The telecom giant said Wednesday that its U-verse TV service has crossed the half-million subscriber mark and is on track to exceed 1 million customers this year.

With a net subscriber gain of 170,000, the company ended the second quarter with 549,000 U-verse users.

In its quarterly earnings report, AT&T also said it remains "on trajectory" to exceed 1 million subscribers by year's end.

Although U-verse has been slower out of the gate than Verizon's FiOS TV, AT&T management signaled growing comfort with the product, saying network deployment is on schedule and that install times continue to decline.

Analysts also highlighted a continued decline in AT&T customers signing up for TV service via Dish. The 3,000 additions in the second quarter was down from more than 85,000 in the year-ago period and 40,000 in the first quarter.

Sanford C. Bernstein analyst Craig Moffett called this "a truly awful result" and suggested the weak momentum could make AT&T more likely to choose DirecTV over Dish as its satellite TV partner after their current relationship ends this year.